How to Prepare for Recession: Tips from Real Estate Professionals

Teresa Mack | 11/07/2022

 

In today's economy, it isn't easy to make ends meet. It often results in people being volatile in their spending decisions. This means that people are not as patient in the market as they need to be. They may sell assets early to recoup losses quickly or spend money they would otherwise save. Either way, this can lead to a market recession.

Real estate investing is always risky, but those were the days when you could make some serious coin by snapping up a property before prices crashed. If only it were that easy! As a real estate investor, you want to be prepared for it. And if you think back to the last crash in 2008, the best deals were the years after that. If you had capital, you could’ve made money. It's as if your purchases didn't even matter because prices were insanely low. I've heard most from investors looking back at it: "I wish I would've bought more properties."

Everybody knows there's a recession coming. We've always been talking about it, and even though we can't predict precisely when it will start, we know it may happen. That's why you need to be prepared. Not only will this recession significantly impact your finances, but it will also significantly impact your personal life. And that means you need to know what to do to prepare yourself.

In this article, let’s go over some tips from real estate professionals on the most important things you need to keep in mind if you want to know how to prepare for recession and make the most of your opportunities.
 

Use downtime moments to plan

Every industry goes through a cycle. It's natural for businesses to grow and shrink, for sales to increase and decline, for inventory levels to fluctuate, and for job opportunities to be available and scarce. So if you can anticipate the ebbs and flows of the marketplace and plan accordingly, you'll be able to handle whatever comes your way. As long as you plan for it, it can be an opportunity to take some extra steps to ensure that you are in a good place when things start picking up again. To help you adjust to that, you can:

  • Have A rigorous marketing plan updated and ready to go
  • Keep your listings current and optimized
  • Get organized and prepared for showings 
  • Stay positive, despite any obstacle

Track and cut off expenses

It may sound negative but it’s always good to be prepared for the worst. No matter what the economy looks like, it would be best if you had a solid plan for dealing with money when things aren't going well. That's why it's essential to stay on top of your spending and grasp your financial situation well.

Real estate investing can be very profitable, but it's essential to consider whether an expense tangibly benefits you. When evaluating whether to incur a cost, it's helpful to think about the "return on investment" (ROI). This refers to the financial benefits realized as a result of investing in real estate—both in terms of capital gains and rental income. You should also take into account any other help that may be attributable to owning or using real estate. For example, you might gain time by avoiding unnecessary commuting expenses or convenience by being able to live in a desirable area without having to deal with pesky inner-city noise or crowds. In order to properly assess your real estate goals and determine if it makes sense to incur costs related thereto, it's essential to have a clear understanding of what those costs entail.

Make use of the digital industry

It's not just the current economy that's causing businesses to do more with less. It's also our technological advancements that are changing the way we do business altogether. Gone are the days when we had to negotiate in person or read through lengthy contracts, preferring instead to conduct transactions electronically. That's why it's so crucial for businesses to take advantage of these technological advances and make the switch to a digital presence if they haven't already. Client meetings can be replaced with Zoom or Skype calls, property tours can be replaced with Matterport or Asteroom tours, and closing can be conducted digitally. In a time of uncertainty, finding ways to work business as usual without things being business as usual is crucial.

Nurture relationships with clients

In uncertain economic times, knowing what the future holds can be challenging—which can considerably impact your business. That's why you need to show your clients that you're still able and willing to help them in whatever market we find ourselves in. This means being professional, remaining attentive to their needs, and treating them the way you want to be treated. You cannot afford to lose any key client relationships at this time, so show them that you're essential for their success.

Keep on marketing

In the business world, there are two types of people: those who are always in motion and those in a state of permanent flight. The first group represents those constantly looking for new opportunities, chasing after fresh leads, and working to improve their position in the market. The second group comprises people who have resigned to a life of stagnation, resignation, and distance from their previous success. It's no secret that being out of the loop can devastate your ability to take advantage of current opportunities and progress on your goals. To stay ahead of the competition and maintain your lead in the market, you must constantly move forward.

People buy things for many reasons. Sometimes they need or want something right away, and sometimes they're waiting for the right time or situation to strike. In any case, they always want to know who is selling the thing and what their motives might be. That's where your marketing efforts come in. 

It would help if you did everything possible to get your name out there so your prospects know who you are and what you stand for. You can do this by running active lead generation campaigns, investing in property marketing, and even building brand awareness through social media marketing. But the best way to accomplish all this is to start by letting people know who you are and what you stand for.


When we talk about the housing market, it's essential to keep in mind the individual houses for sale and the broader economy as a whole. This is because the housing market is just one small part of a much bigger picture. 

For example, let's look at what's happening with the overall economy. Right now, several sectors of the economy are contracting—particularly the stock market and the real estate market. But that doesn't mean that all sectors of your call will slow down. 

If things go south for a while in the real estate market, it's essential to understand that this may not be an isolated event. Many other sectors of the economy might also contract, so it's critical to have a comprehensive understanding of your market before making any decisions.

Real estate is one of the most competitive industries to be successful. A recession and its negative consequences can create opportunities for up-and-coming real estate agents—many legacy brands with years of experience and a considerable client base struggle during a recession. Upstart agents can establish themselves as influential players and build lasting relationships with clients by coming out on the other side of a recession ahead of the game.

A financial recession and its negative consequences can have some unexpected benefits for upstart real estate agents. For one, a recession eliminates many of legacy brands' advantages. 

Savvy and Recession-Proof Real estate agents can set themselves up for significant success. When a recession happens, long-standing business practices and mindsets that have created an advantage for legacy brands become a considerable disadvantage. An upstart real estate agent doesn't have to worry about high overhead costs and the need to hire expensive employees. They also don't have to deal with the years of loyalty and customer base building that comes with being a well-established business. This leaves them free to pursue their true passion - real estate - in an industry where the price is always an important consideration.

Playing the agent game in these challenging times means finding creative ways to show your clients that you offer value above and beyond what they could find elsewhere. This may require developing new business models, working with different types of people and industries, or coming up with innovative ideas for marketing yourself and your practice. We have faith in you – we know you can do this!
 

 

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How to Prepare for Recession: Tips from Real Estate Professionals

Teresa Mack
11.07.2022
 In today's economy, it isn't easy to make ends meet. It often results in people being volatile in their spending decisions. This means that people are not as patient in the market as they need to be. They may sell assets early to recoup losses quickly or spend money they would otherwise save. Either way, this can lead to a market recession.Real estate investing is always risky, but those were the days when you could make some serious coin by ...

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